JPM ups Millicom to 'overweight' as it sees cash flow generation recovery
28/03/2024 12:03
** J.P.Morgan upgrades telecoms group Millicom TIGOsdb.ST
to "overweight" from "neutral," seeing high cash flow generation
ahead, driven by increased EBITDA, reduced capex and lower
spectrum-related outflow
** The broker expects Millicom, which provides telecom
services in Latin America through its TIGO brand, cash flow
generation to jump to more than $500 million in 2024, resulting
in 15% FCF yield
** In 2023, Millicom's equity FCF was negative $18 million,
impacted by $106 million in various one-off costs
** "We believe this cash flow level to be sustainable in the
coming years as EBITDA should continue to expand," JPM says,
adding that proceeds should be roughly used to delever the
company in the coming years
** Millicom trades at the lowest multiple among LatAm telcos
at 6.9x EV/OpFCF'24E, it adds
** JPM increases PT by 37% to SEK 260, a 23% premium to
Wednesday's closing price
** Millicom's Stockholm-listed depository receipts rise
3.8%; trading at their highest price since February 2023
(Reporting by Elsa Ohlen)
((elsa.ohlen@thomsonreuters.com;))